Analyzing the Shifts in Hampton Roads Real Estate Market in March 2024
The Hampton Roads region of Virginia has witnessed significant changes in its real estate landscape in March 2024. By delving into the latest market summary, we can glean insights into the trends that may influence both buyers and sellers in the region. Here's a detailed look at the key indicators.
Active Listings on the Rise
Starting with active listings, there has been a substantial increase of 14.40% from March 2023 to March 2024. The numbers have gone up from 3,124 listings to 3,574. This rise indicates a growing inventory in the real estate market, possibly hinting at a shift towards a buyer's market. More options for buyers could mean more competitive pricing and better negotiation leverage.
Pending Sales Dip
In contrast, pending sales have experienced a decline, with a decrease of 5.58%. Last year, in March 2023, the region had 2,454 homes waiting to close. This year, that number has fallen to 2,317. This drop could suggest that fewer buyers are entering the market or that sales are taking longer to finalize.
Settled Sales Decrease
The settled sales followed a similar downward trend with a -9.66% change. The sales completed in March 2023 were at 2,277, but a year later, they've decreased to 2,057. A decrease in settled sales typically reflects a cooling market, where demand is not as robust as before.
New Construction Sales Take a Hit
New construction sales have seen the most significant downturn at -16.89%. From 296 sales in March of the previous year, it has tumbled to just 245 in March 2024. This decline could be an indicator of various factors, including higher construction costs, fewer new developments, or a change in buyer preference.
Median Sales Price Sees Modest Growth
In the midst of these fluctuations, the median sales price tells a different story with an increase of 3.75%. The price has risen from $320,000 to $332,000 year-over-year. This growth amidst decreasing sales volumes could point towards a market where buyers are willing to pay more for less available stock, keeping the property values afloat.
Conclusion
The Hampton Roads real estate market is exhibiting a mix of growing listings and decreasing sales, which can influence the market dynamics in various ways. For sellers, the increased competition could mean that pricing strategies and home presentation will become more critical than ever. Buyers might find more options available, but the higher median price indicates that desirable properties still command premium pricing.
The dip in new construction sales is particularly noteworthy, as it might signify long-term shifts in housing availability. As we continue to navigate through 2024, stakeholders in the Hampton Roads real estate market should keep a keen eye on these trends and prepare for a market that is clearly evolving.
No one wants to overpay for their home, and buying a home in a competitive market often leads to offers above list price. But how can you both write an offer that positions you to win the deal, without needlessly overbidding? That’s where purchase price escalation clauses come into play. Using an escalation clause in your offer is the best way to write an aggressive offer while hedging against overpaying, and I’m going to teach you everything you need to know about them in this blog post
If you’re buying a home in a competitive market, you’ll need a strategy to help position you to win the deal, and while you always have the option of offering the absolute max you’re willing to pay for a home, that can often lead to paying more than you would have to, if your max is significantly higher than the competition. While there will always be people who are ok with that, as long as they lock down their dream home, most buyers would prefer to not pay more than they have to in order to win the deal. That’s why having a strategy that allows you to still put your absolute best foot forward, while hedging against the competition not having as high a ceiling as you is extremely important when writing an offer on a home. This is exactly what the escalation clause does.
So what is an escalation clause? An escalation clause is an addendum to your offer that tells the seller you’re willing to beat the next best offer by a certain amount, up to a certain amount. In order to use an escalation you need to know two things. First, what’s the max you’re willing to pay for this house? And second, by how much are you willing to beat the next best offer by? These two factors will determine whether or not you position yourself to win the deal. Of course, there are other factors that go into an offer, but these are the big ones. When we use an escalation, it’s important to note, that generally speaking, we’re calculating off the seller net. This can make things a little more complicated if one of the offers is requesting closing cost assistance, but for the sake of this video we’re going to leave closing cost assistance out of it. The easiest way to show how an escalation works is to run through an example of how you might use this.
Let’s say you’re planning to write an offer on a $500,000 home. You know there will be multiple offers, but you absolutely love this house. You’re willing to pay up to $550,000 to get this home. You’re also willing to beat the next best offer by $5,000 up to that amount in order to get it. So you write an offer for $500,000 that includes an escalation clause that outlines the fact that if someone else writes an offer that’s $500,000 or higher, then you’re offer will automatically increase to $5,000 higher than whatever their offer is, as long as it doesn’t push your final purchase price over $550,000. So, for example, if someone else writes an offer for $530,000, then your offer automatically goes to $535,000. Assuming other factors are the same, this put you in a great position to win the deal without having to go to your max price of $550,000 and saves you $15,000 on the principal purchase of your new home.
Now, If no one writes a competing offer, then your offer stays at your initial price of $500,000. And if someone writes an offer for over 550 then, unfortunately, your offer will be outbid since yours doesn’t go above 550. That’s why it’s very important to make your cap, your true cap. Sellers may not give you the opportunity to improve on that number in a competing offer situation, and the last thing you want to have happen is lose out over a few thousand dollars because you didn’t put your best offer in when you had the chance.
In that example, I used $5000 as the increments we went up by, but this number can be anything you want. It tends to get higher, the higher the sales price is. I’ve seen it as low as $100, though in that case the seller found it laughable and didn’t take the deal. But it’s common in our area on lower priced homes to see it at $500 on lower priced homes and 10-20,000 or even more on higher end homes. The key is find an amount that would make a big enough difference to the seller so they pick your offer over the other one. Sometimes just a few bucks isn’t enough to influence a seller if there are other factors in play, like ideal closing date, or shorter home inspection period…something like that.
There are other factors to consider when using the escalation clause. First, you need to make sure you’re approved for the full amount. You’ll want to include a pre-approval letter from your lender for the full escalation amount along with your offer. This shows the sellers that not only can you afford the house at list price, but you are definitely qualified for your max amount. You’ll also want to run the numbers to make sure you’re comfortable with how the escalation affects both your down payment and your monthly mortgage amount. Just because you qualify for the max, doesn’t necessarily mean you’re going to be comfortable making the payment every month. The final factor is appraisal. Bidding well over list price is great and all, but if you’re getting a mortgage, you’ll still have to appraise for the sales price or you could potentially lose the deal. In a previous video, I discussed appraisal gap guarantees as a way to protect against this, and you can learn more about those here.
One question I always get when writing an offer with an escalation is, won’t this tell the seller our max and could they use this against us to get us to pay more? The real answer is…only if you let them. There are absolutely situations where a seller could say, hey we’re planning to take this other offer, but we see you’re willing to go higher than where your escalation currently puts you. If you go to your max, or instead of $5000, go $10,000, then we’ll go with you instead. At that point, the ball is in your court, and if you’re willing to do it, then go for it, and if not, stand firm with your offer the way you wrote it and let them decide. I recently had this happen with a buyer – the competing offer was all cash, so they said if you’ll go 10K over them, then it’s all yours. She said sure, because it was still below her max, and now she lives in a gorgeous home a block off the beach.
The other big question I get is, how do I know they’re not lying to us? What if there is no competing offer? Well, the good thing about our purchase contract is that when using the escalation addendum, the listing agent is required to provide the competing offer that shows exactly how the escalation came into play. So we’re always going to be able to verify that we aren’t being deceived in any way. That may not be true everywhere, so if you’re buying a home outside of southeastern Virginia, then you’ll definitely want to discuss this with your agent.
So there it is, the purchase price escalation. This is absolutely the best way to write an strong offer, without wildly outbidding your competition. No one likes overpaying for anything, and in a competitive market you may already be a little taken back by why you need to offer to be competitive, so throwing away extra money on top of today’s high home prices can really hurt. The purchase price escalation will help protect you, and your investment, while positioning you to win the deal!
If you have any questions whatsoever, please call, text or email me any time!
Purchasing a home in a competitive market can present many challenges. It’s important you know every negotiating tactic at your disposal, in order to beat out your competitors and win the deal. So today we’ll discuss one of the most important tools in the toolbox – guaranteed cash above appraisal, or as we also call it, appraisal gap guarantees.
We’ve been in a strong seller’s market for several years now. And multiple offers are still the norm throughout much of Hampton Roads. There are many factors that go into writing a winning offer on a home. When you go to write an offer on a home you love, you may need to do everything you can to win the deal, because more often than not - and this shouldn’t come as a surprise – sellers want to get the most money they can for their home. That’s where cash guarantees above appraisal come in.
Let’s start with what sellers want. Sellers want deals with the highest probability of closing at the agreed upon terms of the contract, particularly the agreed upon sales price. The fewer variables, the less risk, the higher chance of that happening. So sellers are often inclined to take the offer that gives them the best chance at closing without having to adjust the final terms, and some deals are riskier than others.
You’ve heard the saying before, cash is king! Well, in real estate, a large part of the reason cash is king is because there’s usually no appraisal involved in all cash transactions, meaning the agreed upon sales price will generally be the final sales price, and not subject to the opinion of an appraiser, who may value the home below the purchase price. You see, whenever you purchase a home with a mortgage, the bank is going to send an appraiser out to the property to value the home, and in a rising cost environment, it’s not uncommon for the appraisal to come in low. Afterall, they’re basing their appraisal price on comps that may have sold several months ago when prices were a little lower, and we normally get our list price based off the same comps the appraiser is going to use, so it’s common for both listing agents and sellers to assume the appraisal should come in somewhat close to the list price.
The important thing here is that the bank is not going to provide you with a loan for more than the appraised value. That’s regardless of loan type or down payment, so in a standard transaction if the appraisal comes in below sales price one of three things needs to happen; either the sales price needs to be adjusted down to the appraisal price, which can cost the sellers thousands of dollars, or the buyer needs to make up the difference with cash. Or the third option would be a combination of the two, finding some middle ground where the price is adjusted and the buyer still brings some cash. And That’s where cash guarantees above appraisal come in.
A cash guarantee above appraisal, or appraisal gap guarantee as we also call it, is when you indicate in your offer to the seller that you’re willing to make up the difference between the appraisal price and the agreed upon sales price, or at least a portion thereof, by bringing extra cash to closing, above and beyond your down payment and closing costs. This tells the seller that the price that was negotiated has a high probability of closing at that price, and strengthens the terms of your offer considerably. Afterall, that’s what sellers want to hear. They want to know that the deal they accepted is the one that they’ll go to closing with.
So let’s run through a few scenarios so you can get a better understanding of how this works. For the sake of these examples, we’re going to leave out closing costs. Just know you still need to have the money for your closing costs on top of your down payment, and your appraisal gap guarantee.
OK, Let’s say you’re planning to buy a home listed for $400,000. It’s a competitive situation, so you go over list price by $20,000 and you have the winning offer of $420,000 with a $20,000 cash guarantee above appraisal. You’re planning to put 20% down, which in this case is $84,000 as long as the appraisal comes in at $420,000 or higher. But in this case, it comes in right at list price of $400,000. Now the bank is only going to base your loan of the appraisal value of $400,000, so instead of putting $84,000 down, you’ll now be putting $80,000 down towards your mortgage, along with another $20,000 to make up the appraisal gap, so you’ll need to put $100,000 down total to close on the purchase. In this situation, you still get your house, but you’re out $16,000 more up front than you would have been at $420,000. But on the bright side, you got the house for less and the seller is still very happy because they got the sales price you agreed to.
Ok, so now let’s take the same transaction, but instead of the appraisal coming in at $420,000 it comes in at $410,000. In this scenario you’ll now be putting $82,000 down and bringing an extra $10,000 to the table to get to $420,000. The way we generally write these clauses is that you’ll make up the gap that gets you to, but not above the agreed upon sales price. So in this case instead of having to bring the full 20 thousand, you only have to bring 10. And again, seller still gets the agreed upon price of $420,000.
Scenario number three: Same terms of the contract, but oh no, the appraisal came in way low at $390,000! In this case, the sellers would have to agree to lower the sales price down to $410,000 because you’ve already said you’re willing to pay $20,000 over appraisal price. Just because they’ve agreed to accept the terms of your contract, doesn’t mean they have to lower the price if your cash guarantee doesn’t make up the full difference. They could, theoretically, kill the deal. Assuming they do agree to adjust the sales price to $410,000 you’ll be putting $78,000 down along with $20,000 more to make up the gap. So you’re in for $98,000 at closing, but the sellers lose 10 grand of potential profit.
Now, there are certainly other ways to do this. You don’t need to offer the full price difference. You can offer a purchase price 20K over list price, but only offer a 5 or $10,000 appraisal gap guarantee. That’s a whole lot better than nothing, and will absolutely strengthen your offer. Or you could go the other way. In our second scenario, I mentioned we usually cap the guarantees at the agreed upon sales price, however that’s not a strict rule. You could leave it open ended and offer to pay X amount over the appraisal no matter what it comes in at. That’s less common, but would certainly put you in a great position to win the deal.
As great of a strategy as cash guarantees are, you have to have the money to do it. And that’s where this can be a limiting factor for many buyers. Let’s go over, real quick, who may not be able to take advantage of this strategy.
First is our first time, low money/no money down borrowers. Many young people buying their first home just aren’t going to have the funds on hand to implement this strategy, especially if they haven’t been in the work force long enough to be able to tap into a 401K or other savings plan. Second, are our military VA loan buyers. The VA loan is a no money down loan, and many buyers who are using this loan type are trying to keep it that way, so the idea of guaranteeing cash above appraisal just isn’t going to be an option. In quickly rising markets, even in a huge military area like Hampton Roads, we often see VA loans used at a far lower rate, because they can’t compete with conventional loans with guarantees. But If you’re a VA buyer or a first time home buyer, reach out, we do have ways to help position you to still be competitive. The third buyer who may not be able to implement the cash guarantee, and this one may come as a bit of a surprise, is someone who needs to put 20% down, but doesn’t have more than that on hand. Putting 20% down allows you to avoid paying mortgage insurance, and can significantly reduce your monthly payment. If the cash guarantee forces you to only put 10 or 15% down, then you may not want to do the deal at all. Or you could, potentially, not even qualify for the loan without the 20% down. So Oddly, someone who is only planning to put 5 or 10% down, but has the extra funds is in a better position to offer an appraisal gap guarantee than someone who has to put 20% down, and has the funds, but nothing extra. In fact, I recently had a deal where this exact scenario played out. Fortunately, my client was the one putting 10% down, and had an extra $10,000 for a guarantee above appraisal, so we won the deal.
Well there it is, the cash above appraisal buying strategy. This is absolutely one of the strongest and most important strategies you can implement when purchasing a home in a competitive environment. And I know that the idea that you may have to come out of pocket with the extra cash is never fun, or you may feel like you’re “overpaying”, but it can often be a requirement in order to lock down a home for you and your family, so it’s best to know that it’s an option, and one to consider using when writing an offer. If you’re a ways out from buying, you never know what the market will look like, but it’s smart to start planning for it now that way if it’s a necessity, you’re fully prepared to go out and get your dream home!
If you have any questions, or are interested in make a move to the Hampton Roads/Williamsburg area, please call, text, or email any time!
I get it, I can't live more than 10 minutes from a Starbucks either! When you're looking to move to a new area it's important to know that you'll have access to your favorite shops, whatever they may be. But at the top of that list for many of us is coffee! I had a bunch of people recently tell me when they're looking for a home their top priority is finding their closest Starbucks, so in this video we'll review where all the Starbucks locations are, as well as the other coffee shops in Newport News, Virginia.
The coffee scene has gotten a lot better here over the years. There's a Starbucks on what seems like every street corning, a bunch of Dunkin's, several Panera's, and now several great, independently owned cafe's. I find that most of the Starbucks have become mostly drive throughs, with the indoor seating rarely used. The only exception might be the CNU Starbucks. But the cafe's have become very popular and a great place to meet up with friends, schedule a work meeting, or just get some work done. They've really brought some vibrancy to the area!
Call, text, or email with any questions or to get your home search started. My team and I are here to help!
Phone: 757.9414.6444
Email: TortoliniHomes@gmail.com
Search homes for sale in Newport News: https://www.dtrgva.com/newport-news/#starbucks#coffee#newportnews#homesforsale
In this video we'll swing by three neighborhoods in three parts of York County, Virginia to see what has sold recently for between $500,000 and $600,000. Relative to the neighboring cities of Newport News and Hampton, York County is significantly more expensive. So what you'll see today is fairly middle of the road for York County. For the purposes of this video we'll stay in the southern end of York County, and view a home in Tabb, one in Grafton, and one in Yorktown. The northern section of York County is actually considered part of the greater Williamsburg market, which makes it a bit of a different thing, so we'll head there in a later video.
Home #1 is 105 Wicomico Turn (sorry for butchering the name in the video), which is located in the neighborhood of Running Man in Tabb. This home was built in 1987, has 4 beds, 2.5 baths and 2866 square feet of living space. It was listed for $535,000 and sold for $550,000. You can see this home here: https://www.dtrgva.com/property/10423449/?addrs=1
Home #2 is 106 Jacobs run, which is located in the neighborhood of Jacobs Springs in Grafton. This home was built in 1991, has 4 beds, 2.5 baths, and 2648 square feet of living space. It was listed for $485,000 and sold for $510,000. You can see this home here: https://www.dtrgva.com/property/10431748/?addrs=1
Home #3 is 911 Marlbank Drive, which is located in the neighborhood of Marlbank Cove in Yorktown. This home was built in 1988, has 4 beds, 3.5 baths, and 3434 square feet of living space. It sold right at it's list price of $595,575. You can see this home here: https://www.dtrgva.com/property/10419203/?addrs=1
View all homes currently for sale in York County between $500,000 and $600,000 here: https://www.dtrgva.com/YorkCounty500-600K/
Whether you're buying or selling, my team and I are here and ready to help. Contact us any time!
Welcome to our May 2022 Hampton Roads Real Estate Market Report!
Lots of great stats out from this past month vs last year. In this video we'll take a look at the following four categories and how they affect your opportunity to buy or sell a home in Hampton Roads.
1) Active Listings - year over year we're down 15.69% from 3780 homes for sale to 3187. Good news is that this is up from this winters low of about 2700 homes for sale. But it's not nearly enough inventory to meet demand!
2) Pending Sales: April 2021 saw 3608 homes go under contract compared to just 3106 homes in April 2022. That's not because buyer demand is down, that's because there just weren't as many homes to sell!
3) Settled sales: There were 3194 closings in April 2021 compared to 2814 in April 2022. Again, this is due to the decreased supply of homes for sale in Hampton Roads. In March there were only about 2800 active listings, so that's all the houses!
4) New Construction - sales are down 35 total units year of year. We just don't have a lot of new construction in Hampton Roads. Hopefully we'll see new construction starts pick up and bring you better numbers this time next year
And of course we have our Stat of the Month! The median sales price in Hampton Roads has hit an all time high of $319,900!! That's up 12.25% year over year ($285,000). And I expect that record to be broken just about every month for the rest of this year. Demand is still far outpacing supply, and until those balance out, we'll continue to see price appreciation.
If you are looking to buy or sell a home in Hampton Roads there's no better place to start than right here on dtrgva.com! Of course you can always reach out to us directy - My team and I are ready to help!
In this video we'll take a look at what you can buy in Newport News, Virginia for between $300,000 and $400,000. We're sticking with single family homes and are generally speaking, staying in the centrally located neighborhoods of Maxwell Gardens, Glendale, and Summerlake Shores. When it comes to this price range, I think the big thing you'll see over the high 200's is neighborhood desirability. Maxwell Gardens and Glendale are both in the coveted 23606 zip code, which puts them in close proximity to Christopher Newport University, Riverside Hospital, The Mariner's Museum/Noland Trail, and City Center at Oyster Point. That, along with being equidistant to the Newport News Shipyard and Fort Eustis puts both these neighborhoods on the outskirts of arguably the most desirable part of Newport News. The homes we'll view in the high 300's are much newer, and still in a highly desirable area, but are also much larger, where you can expect to be in the 2500 sq ft range, though more of your traditional late 90s style.
Let's take a look at our homes for today!
Low 300s: 123 Keith Rd, Newport News, VA 23606 Located in the neighborhood of Maxwell Gardens this 3 bed, 2 full bath, 1991 sq ft home was listed for $300,000 and sold for $305,000. You can view this home here: https://www.dtrgva.com/property/10424267/?addrs=1
Mid 300s: We have two properties! Both are in the neighborhood of Glendale. Property #1 is 131 Moline Dr. 4 beds, 2.5 baths, 1883 sq ft. Listed for $295,000 and sold for $340,000. You can view this property here: https://www.dtrgva.com/property/10426817/?addrs=1
High 300s: 237 Southlake Place is located in the neighborhood of Summerlake Shores in the Menchville area of Newport News. This home features 4 beds, 2.5 baths, and 2728 sq ft of living space. It was listed for $390,000 and sold for $390,000. (I got this completely wrong in the video!) You can view this home here: https://www.dtrgva.com/property/10423140/?addrs=1
We look forward to helping you with your next home purchase in Newport News or any of the surrounding area! Contact us today to get started Phone: 757.414.6444 Email: TortoliniHomes@gmail.com
In this video we explore what you can buy in Newport News, VA between $200,000 and $300,000 in the spring of 2022. We're looking at single family only in this one. We'll head out and view three different homes various parts of the city; one in the low 200s, one in the mid-200s, and one in the upper 200s. I think you'll find there's a distinct difference between the three price points. Of course, in a city as big as Newport News, location is going to play a huge factor. So sure, you can probably get what he see in the mid-200s for low 200s in a less desirable part of town, while you might pay upper 200s for the same home in the most highly desirable part of town. I tried my best to pick three homes I felt were in the middle and are a strong representation of current market conditions. Our first home is 714 Sedgefield Dr. This was listed for $199,900 and sold for $206,000. It's a 4 bed, 2 full bath, 1380 square foot cape, built in 1950, located in Mid-town. You can view this property here: https://www.dtrgva.com/property/10417... Our second home is 177 Hawthorne Dr. This was listed for $235,000 and sold for $250,250, located in the Menchville area.. This is a 3 bed, 1.5 bath, 1618 square foot rancher built in 1963. You can view this property here: https://www.dtrgva.com/property/10425... Our third home is 906 Costigan Dr. This was listed for $280,000 and sold for $295,000. It is a 4 bed, 2.5 bath, 1664 sq ft dutch colonial, located in Denbigh. You can view this property here: https://www.dtrgva.com/property/10424... If you're interested in searching all single family homes in Newport News between 200 and 300K, you can do that here: https://www.dtrgva.com/NewportNews200... My team and I area ready and waiting to help you buy your next home in Newport News or any of the surrounding cities! Contact me directly to get started
In this video I take you to my 5 favorite outdoor spots in Newport News, Virginia! Living in Newport News can be a lot of fun if you like to be outdoors. While some of the neighboring cities like Hampton and Virginia Beach are going to provide a more coastal, beachy lifestyle, nowhere else has the amazing park scene that Newport News does! Riverview Farm Park: This park, located in the Menchville area of Newport News, features a 1.5 mile walking path, massive playground, soccer fields, two dog parks, and a pier on the James River. There's also a concession stand that's open during the sports season, covered picnic shelters, and large public restrooms. Search homes near Riverview Farm Park here: https://www.dtrgva.com/RiverviewFarmP...
Huntington Park: Here you'll find the only beach in Newport News! Located along the James River right by the James River Bridge, and the great restaurant, Crab Shack on the James, this is a great place to swim and soak up the sun. Featuring volleyball nets, a boat launch, playground, covered picnic shelters and more! Search homes near Huntington Park here: https://www.dtrgva.com/HuntingtonPark...
Newport News Park: The second largest municipal park east of the Mississippi River and tenth largest in the whole country! This 7500+ acre park has so much to offer! Hiking trails, biking trails, an 18 hole frisbee golf course, RV Camping sites, archery, paddle boating, and more! One of the truly special places in all of Virginia! Search homes near Newport News Park here: https://www.dtrgva.com/NewportNewsPar...
Deer Park: Centrally located in Newport News, this is one of the quieter parks in the area. The two ball fields are used for little league all the time, but the lakefront picnic area, playground, and hiking trails are all less used than some of the bigger parks. This is a great spot to settle down and quietly read a book and go for a walk! Search homes near Dear Park here: https://www.dtrgva.com/DearParkHomes/
Noland Trail: Noland Trail is a 5 mile loop along the James River that goes around and over Lake Maury. Featuring 14 bridges, and wildlife galore this is my personal favorite spot in Newport News. In addition to the 5 mile trail, there are cut throughs and other mini-loops that provide hiking options of any length. This trail is maintained by the Mariner's Museum, and you'll want to head down to Lion's Bridge, along the James, to enjoy the stunning views, and beautiful birds, including pelicans, herons, osprey, and egrets. Search for homes near Noland Trail here: https://www.dtrgva.com/NolandTrailHomes/
If you're moving to Newport News or the surrounding area my team and I are ready to help! Contact us any time by clicking on the contact link at the top of the page. We look forward to meeting you!
